Hospital expenditures and the red herring hypothesis: Evidence from a complete national registry

HERO WP 2013/03: Authors: Gregersen, F.A. Health Services Research Unit, Akershus University Hospital and Campus Akershus University Hospital, Institute of Clinical Medicine, University of Oslo and Godager, G. Institute of Health and Society and HERO at UiO and And Health Services Research Unit, Akershus University Hospital.


The aim of this paper is to contribute to the debate on population aging and growth in health expenditures. The Red Herring hypothesis, i.e., that hospital expenditures are driven by the occurrence of mortal illnesses, and not patients’ age, forms the basis of the study. The data applied in the analysis are from a complete registry of in-patient hospital expenditures in Norway from the years 1998-2009. Since data registration is compulsory and all hospital admissions are recorded, there is no self-selection into the data. Mortality related hospital expenditures were identified by creating gender-cohort specific panels for each of the 430 Norwegian municipalities. We separated the impact of mortality on current hospital expenditures from the impact of patients’ age and gender. This approach contributes to the literature by applying sensible aggregation methods on a complete registry of inpatient hospital admissions.

We apply model estimates to quantify the mortality related hospital expenditures for twenty age groups. The results show that mortality related hospital expenditures are a decreasing function of age. Further the results clearly support that, both age and mortalities should be included when predicting future health care expenditure. The estimation results suggest that 9.2 % of all hospital expenditure is associated with treating individuals in their last year of life.


We wish to thank senior researcher Fredrik A. Dahl and senior researcher Hilde Lurås for extensive discussion regarding method and applying for data from the Norwegian Patient Registry. Thanks to Kamrul Islam for his valuable suggestions. We are grateful for valuable comments and suggestions on a previous version from participants at the iHEA World Congress in Toronto 2011, ASCHE Minneapolis 2012 and ECHE Zürich. Funding from the Norwegian Research Council is gratefully acknowledged. The authors alone remain responsible for any mistakes, errors or shortcomings.

ISBN 978-82-7756-233-9

Publisert 8. mai 2013 14:07 - Sist endret 10. mai 2013 09:43